There are more than 260 registered vehicles on America’s roads and driveways right now. That’s nearly enough for every man, woman, and child in the country to have their own ride. With so many cars available, and so many people in need of personal transportation, questions about when to buy and sell cars are relevant to many. Whether you have a trustworthy nearby used car dealer like J.D. Byrider, or the only cars for sale anywhere around are marketed by individuals on Craigslist, knowing the economics of car ownership is essential. Here are some of the basics.
When to Buy
Obviously, it’s best to buy a car when you can afford to do so, and when you actually have need of a car. If you can get around by public transportation, by bike, by scooter, by skateboard, by small aircraft, etc., you can save a lot of money by doing so instead of buying a car. Many people don’t have access to reliable transportation by any of these means. For these folks, buying a car is essential.
For these people, it’s important to really understand whether or not a car can be afforded at the present time. You may not be able to buy a car for cash (though by all means do so if you can!). For the rest of us, borrowing money from a bank, lender, or dealership is the only way to get behind the wheel.
When analyzing a loan, pay attention not just to the amount you’ll be paying every month, but to the interest and fees related to your loan. If these numbers result in figures that are affordable through a simple debt to income ratio calculator, you can probably afford to buy the car.
Part of understanding affordability, however, is understand what you are buying. It’s important to know how reliable the car you plan to buy will be. Read reviews from lots of other owners. Find out common maintenance issues, and their associated costs. Sometimes a car might seem affordable when you’re only considering the sticker price, but prices go up when it comes to maintenance. Make sure to account for this, and to save for worst case scenarios, when figuring out your budget for a car.
When to Sell
Sometimes a car becomes old and unreliable and we just want to get something new. Other times, a car might still be in good condition, but its retained value makes it worthwhile to sell for something better or more desirable. Try to sell when your car is still in good enough condition to command a decent price. On the other hand, you might try to run your car into the ground, getting as much use out of it as humanly possible before it ceases to function in any role other than scrap.
Buying and selling used cars is a masters class in shopping around, haggling, and analyzing value. It’s a time to improve your financial situation, while buying a piece of machinery that will help you out in your life.